Marking-to-Market : Panacea or Pandora s Box ?

  title={Marking-to-Market : Panacea or Pandora s Box ?},
  author={Guillaume Plantin},
  • Guillaume Plantin
  • Published 2007
Financial institutions have been at the forefront of the debate on the controversial shift in international standards from historical cost accounting to mark-to-market accounting. We show that the tradeo¤s at stake in this debate are far from one-sided. While the historical cost regime leads to some ine¢ ciencies, marking to market may lead to other types of ine¢ ciencies by injecting arti…cial risk that degrades the information value of prices, and induces sub-optimal real decisions. We… CONTINUE READING
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